Activity Slows But Prices Hold

By Bill Swift
Wiest Realty & Mortgage Co., Inc.

    The general downward trend in 2 to 4unit sales activity continued through the 4th quarter of 2006.



    The following charts depict average 2 to 4 unit prices per unit in Apple Valley, Hesperia, and Victorville.  These trends are based on the gross sales volume of properties sold divided by total number of units sold.  Note that prior newsletters were based on the average price per unit of each sale divided by the number of properties sold.  The data omits properties in commercial zones and 2 to 4 unit sales on lots of over 1.75 acres.  It also omits sales between related parties and single family homes with “granny flats”.

    Interestingly, Victorville data shows a drop in prices with an increase in closings while the opposite was true in Apple Valley and Hesperia.  Apple Valley price per unit figures were skewed upward due to three sales of large 4plexes over $600,000.

Average Price Per Unit (Gross Sales/Total Units)

Period	Apple Valley	Hesperia	Victorville
1Q '05	$106,419	$114,476	$109,548
2Q '05	$111,219	$113,354	$104,947
3Q '05	$124,963	$125,152	$107,167
4Q '05	$136,574	$122,676	$100,200
1Q '06	$140,790	$126,979	$119,844
2Q '06	$146,207	$144,941	$107,580
3Q '06	$141,643	$140,556	$140,996
4Q '06	$155,542	$151,941	$127,417

    Fourth quarter prices per bedroom (BR) are shown below followed by square foot price trends.

Average Price/BR (Gross Sales/Total # of BR's) Period Apple Valley Hesperia Victorville 1Q '05 $50,754 $51,149 $54,774 2Q '05 $57,086 $61,400 $56,971 3Q '05 $63,353 $61,642 $64,300 4Q '05 $69,471 $61,338 $60,120 1Q '06 $66,219 $66,978 $63,917 2Q '06 $74,704 $74,667 $76,843 3Q '06 $73,993 $69,000 $70,498 4Q '06 $73,196 $73,800 $67,061

Average Price/Sq. Ft. (Gross Sales/Total Sq.Ft.) Period Apple Valley Hesperia Victorville 1Q '05 $113.89 $118.05 $111.80 2Q '05 $126.34 $142.03 $124.00 3Q '05 $139.41 $139.51 $135.69 4Q '05 $158.93 $122.76 $133.03 1Q '06 $148.22 $156.25 $142.79 2Q '06 $156.04 $185.65 $155.43 3Q '06 $164.32 $161.90 $151.42 4Q '06 $161.09 $176.86 $156.71

    Although sales have leveled off, 5+ unit buyers aren't beating down the doors.  Here is the trend for Apple Valley, Hesperia, Victoriville, and Adelanto as a group.



    The GIM (Gross Income Multiplier) information below is the sale price dividied by the gross income of the projects reported at the time of sale.

City	Avg. GIM for sold projects for 1st 9 mos. of '06	Avg. GIM for sold projects for all of '06	Avg. list price at end of 3rd Qtr '06	Avg. list price at the end of 4th Qtr. '06
Adelanto	11.89	11.89	10.90	10.99
Apple Valley	13.44	13.01	13.26	12.74
Hesperia	12.15	12.15	14.37	14.26
Victorville	13.29	12.04	13.84	14.02

    There were no changes in 3rd and 4th quarter sold GIM’s in Adelanto and Hesperia since there were no sales in the 4th quarter in these cities.  There were 4th quarter sales in Apple Valley and Victorville and both showed drops in value and GIM’s.  Most 4th quarter asking prices were unrealistic.  We find two main problems with the local inventory:



    Call us for an evaluation of your rents and expenses.  We can help make your property stand out from the competition.

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